Dwindling oil price: Explore alternative sources of revenue, FG tells states

18 December 2015, Abuja – aS the price of oil in the international market continues to dwindle, the Federal Government insisted that state governments must begin to explore alternative sources of generating revenues in their respective states to augment what they were getting from the centre as monthly allocations.

*Oil prices drop.

*Oil prices drop.

Addressing newsmen, yesterday, after the National Economic Council, NEC, meeting in Abuja, where Vice President Yemi Osinbajo represented President Muhammadu Buhari; Minister of Budget and National Planning, Udoma Udo Udoma, said the advice became imperative in the face of the country’s present daunting economic challenges.

Udoma said the government, at the meeting, resolved that state governments should not only begin to do away with wastes but also exhibit prudence in the management of their resources,

Udoma said: “At the council today, the Ministry of Budget and National Planning made a presentation on the Medium Term Expenditure Framework, MTEF and the Fiscal Strategic Paper, FSP. The reports highlighted the government’s fiscal policy strategy and direction for the next three years.

“We also briefed council about government revenue and expenditure projections for the next three years. We briefed council about our view in terms of the global outlook and micro-economic frame work and the key assumptions underlining our projections .

“The presentation urged the states to adopt the MTEF and FSP which has now been approved by the National Assembly, which is the only body that can approve it.

“But we urged them to adopt it as a basis for the developing of their annual budgets. We also emphasised the need for states to be guided by the assumptions of the MTEF and also the need for states to be conservative in their expenditure and their expenditure projections for 2016-2018, in view of the declining oil price.

“We also urged states to look towards enhancing their Internally Generated Revenues (IGR) and blocking financial leakages in the system and generally we emphasised the need in planning for the economy for the federal and state governments to work very closely with government because we are dealing with one economy.”

ECA hits $2.257bn

Governor Darius Ishaku of Taraba State said the council was also briefed by the Accountant General of the Federation, Mr Ahmed Idris, on the reports of the Excess Crude Proceeds.

He said: “The Accountant General of the Federation reported to council that the Excess Crude Account (ECA) stood at $2.257 billion as at the end of November, 2015.

“He also reported a slight change against the previous balance with an interest which is due, of $599, 137, 467 into the account as accrued interest.

“We were also briefed on the report of the Federal Government agencies that are collecting revenue in foreign currencies and were remitting the monies in Naira equivalent into the federation account , which is not allowed.

“So the Ministry of Finance is working on the details to pass it to the council with a comprehensive report on the agencies that are involved, which will be later be made known to the public.”

Abacha loot in treasury stands at $26,389, 000

Also speaking, Governor Samuel Ortom of Benue State, said the council was given updates on recoveries from monies stolen by late Head of State, General Sani Abacha, popularly known as Abacha loots.

He said: “We were also briefed on updates on Abacha loots in council. The Accountant General of the Federation reported that the dollar account as at November 2015 ending has a balance of $26,389,000 while the pounds sterling has a balance of £19, 000, 033. That is where we are today.”

Governor Aminu Tambuwal of Sokoto State said the Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, briefed the council on monetary policy of the Federal Government.

He said: “The CBN governor gave an update on monetary policy measures on foreign exchange strategy and he told the council the challenges being faced by many countries as a result of the global economy recession.

“He also reported that the drop in the oil prices has caused serious pressure on Nigeria’s reserve which currently stands at $29 billion.

“He also briefed the council on monetary policy among others as follows:

“The deduction of cash reserve ratio from 25 per cent to 20 per cent. The measure on forex market and Bank Verification Number (BVN) considering the introduction of debit card for travellers instead of cash exchange demands to reduce cash for illicit businesses, and also looking at option to diversify the economy away from oiL”

– Vanguard

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